internationallove

"Add FBS as Friend: winner of this week .(Wednesday, March 14, 2012 )!!! Dear Friends! Correct answer for our weekly “Add FBS as Friend” contest is: 14 USD. The winner who gets 10 USD from FBS to his trading account is a contestant named Shorena Gulashvili. Kind regards, FBS FBS wishes you Finance,Freedom and Success in trading! (Best mini Forex Broker of 2010 - 2011) Stay connected with FBS because its all about you!

"Main economic & market news "(2012-03-14) • FOMC meeting results: - benchmark rate is left unchanged near zero and it planned to be kept there through at least late 2014; - additional easing is still an option; - US economic outlook was upgraded from "modest" to "moderate" growth; - however, unemployment rate is “elevated” and “significant downside risks” are still in place. Inflation outlook is “subdued.” • Australian consumer confidence is down by 5% this month, while housing starts dropped in the fourth quarter by 6.9% versus 3% decline expected (q/q). • Japanese business sentiment sharply deteriorated in the first quarter. • According to The Telegraph which citing a leaked Troika report, Greek budget deficit will probably fall to 1.5% in 2012 in line with the forecasts but “current projections reveal large fiscal gaps in 2013-2014.” • The Fed released US banks stress test results: 15 of 19 banks would be able to maintain capital levels above a regulatory minimum in an “extremely adverse” economic scenario. The 4 banks which wouldn’t have enough capital if economic situation worsens (13% unemployment) are Ally Financial, Suntrust, MetLife and Citigroup. Analysts at RBC Capital Markets showed that the fact that the majority of the banks succeeded in passing the test shows that US banking system is strong. DJIA reached the highest level since 2007. Yields on 10-year Treasuries increased to 2.13%. Specialists at Bank of Tokyo-Mitsubishi UFJ think US yields rise because the nation’s economy strengthens. In their view, the Federal Reserve may be forced to raise the key rate before the end of 2014, probably the next year. American currency generally strengthened. Asian stocks rose, EUR/USD went a bit lower to yesterdays’a minimums in the $1.3050 area. The pair opened below 55-day MA. USD/JPY keeps rising. Chart. Daily EUR/USD Comment here http://www.fbs.com/analytics/2012-03-14/16889-main-economic-market-news

"Bank Sarasin: comments on franc and euro "(2012-03-13) Economists at Bank Sarasin are strongly convinced that the Swiss National Bank won’t raise the threshold EUR/CHF higher than 1.20 unless recession continues and deflationary threats keep looming in Switzerland. The analysts say if there was no floor set for the pair, the rate could be as low as 1.10. Although the franc has strengthened since the start of the year, it has remained above the 1.20 floor, trading at 1.2057 against the euro on March 13. The bank thinks, however, that the threat of further SNB intervention will contain franc’s advance in the near future. According to Bank Sarasin’s specialists, European growth is going to resume in the second quarter after the ECB liquidity injection. Perhaps, the liquidity will buy the time that is needed for a recovery, and in a long-term period EUR/USD may climb to $1.38 or $1.40. On the other hand, the economists warn that excessive liquidity always weakens the currency. Comment here http://www.fbs.com/analytics/2012-03-13/16887-bank-sarasin-comments-franc-and-euro

"Credit Agricole and Commerzbank about AUD/USD "(2012-03-13) Analysts at Credit Agricole note that Australian dollar reached critical level versus the greenback. To maintain medium-term uptrend AUD/USD must close today above $1.0505 (March 7 maximum, “bullish hammer” reversal pattern). Otherwise, the sideways range may widen or Aussie will start sliding. The bank recommends buying Australian currency at the current levels stopping below $1.0505 and targeting recent highs in the $1.0800 area. Strategists at Commerzbank think that AUD/USD has topped at $1.0856 on February 29 and is now going to weaken to $1.0406 (200-day MA) and $1.0382 (December maximum). Below these levels the pair will be poised down to the parity and lower. According to the bank, the outlook for Aussie will remain negative as long as it’s trading below resistance at $1.0670. Chart. Daily AUD/USD Comment here http://www.fbs.com/analytics/2012-03-13/16885-credit-agricole-and-commerzbank-about-audusd

"Loonie may strengthen versus the greenback "(2012-03-13) On Monday Canadian dollar declined against its U.S. counterpart as weak Chinese export data hurt commodities. According to the data released on Saturday, China posted its biggest trade deficit in at least a decade in February ($31.5bn), fanning concerns about growth in the world's second largest economy. After that the price of crude oil, Canada’s biggest export, fell by 1.9%. Today USD/CAD is trading at 0.9900 after opening at 0.9924. According to analysts, market sentiment towards the Canadian dollar has turned favorable, with weekly CFTC data showing consistent increases in CAD long positions since mid-January. Strategists at Scotia Capital say that recent M&A activity, including talk of a takeover of Viterra, Canada's largest grain holder, helps the currency. Typically any large M&A announcement has the psychological impact of reminding market participants that Canada has a lot of interesting assets that can be M&A targets in the future. Analysts at UBS are bullish on CAD due to the solid domestic macroeconomic data and the fact that the BOC Governor Carney has accordingly become less dovish in his outlook. In their view, although loonie’s rate has already priced in potential policy tightening, loose monetary policy of other major central banks will make Canadian dollar very attractive. Canadian currency is the best performer among 10 developed-nation counterparts over the past week, adding 1%, according to Bloomberg Correlation Weighted Currency Indexes. The U.S. dollar lost 0.1% and the euro gained 0.3%. Loonie will trade at parity with its U.S. counterpart by the end of the second quarter, according to the median of 40 forecasts compiled by Bloomberg News. Chart. Daily USD/CAD Comment here http://www.fbs.com/analytics/2012-03-13/16884-loonie-may-strengthen-versus-greenback

"BOJ refrains from easing, but yen’s outlook seem negative "(2012-03-13) The Bank of Japan kept monetary policy unchanged at today’s meeting in line with the expectations. The benchmark interest rate remains below 0.1%. Some traders got disappointed as the BOJ didn’t increase asset purchases after boosting them by 10 trillion yen in February. The Bank of Japan’s decision may be explained by the fact that yen backed off the record maximums, stock markets are showing positive dynamics and the tensions in the euro area eased after the Greek deal. Instead the central bank expanded by 2 trillion yen ($24 billion) to 5.5 trillion yen a loan scheme aimed to encourage banks to fund prospective growth industries and extended its deadline by two years to March 2014. One trillion yen will be used in a new credit line using the BOJ's dollar reserves to encourage investment and loans denominated in foreign currencies. Such actions aren’t as powerful as QE, but still indicate the central bank’s willingness to help national economy. Japanese yen strengthened from 11-month minimum versus US dollar after the BOJ meeting’s results were announced, but then dollar-bulls regained power: the pair USD/JPY has initially dipped to 82 yen, but then set daily high at 82.79 yen. RBS: “The Bank of Japan is basically maintaining its stance of monetary easing after setting an inflation goal of 1%. To clarify its determination to beat deflation, the BOJ could ease policy further as early as late April.” Citibank: Although some investors got disappointed, “today's decision is not something that can reverse the yen's fall.” Among the reasons to remain bearish on yen one may name Japan's trade balance switching to deficit, monetary outflows from Japan as Japanese companies are seeking to enter foreign markets and relatively low odds of QE3 in the U.S. Chart. H4 USD/JPY Comment here http://www.fbs.com/analytics/2012-03-13/16882-boj-refrains-easing-yens-outlook-seem-negative

"Citigroup: which G20 currencies outperform others "(2012-03-13) Analysts at Citigroup claim that while the market players are obsessed with EUR/USD and USD/JPY, a much more profitable trade is to sell G4 majors against other G20 currencies. The specialists analyzed the average (unweighted) performance of eighteen currencies – Australian, New Zealand’s, Taiwan’s, Singapore’s and Canadian dollars, South African rand, Norwegian krone, Swedish krona, Mexican, Argentinian and Chilean pesos, Indonesian rupiah, Indian rupee, Russian ruble, Turkish lira, Brazilian real, Chinese yuan, Malaysian ringgit – and measured their performance against the average of US dollar, euro, British pound and Japanese yen. According to the bank, “G20 smalls” have the highest return relative to their realized volatility so far this year. It may be explained by the liquidity added to the market by the ECB and the BOJ which encouraged risk appetite and somewhat stabilized the global economy improving prospects for the smaller countries in the G20 and, consequently, their currencies. Buying G20 currencies is a way to limit via diversification one’s exposure to risks connected with euro. Such trade is a strong bet on the out performance of risky assets. Comment here http://www.fbs.com/analytics/2012-03-13/16879-citigroup-which-g20-currencies-outperform-others

"UBS, RBS: EUR/USD forecasts "(2012-03-13) UBS: “US payrolls data were again strong in February, with both the headline figure beating expectations and previous months' seeing decent upwards revisions. Continued employment creation at this pace makes it increasingly hard for Federal Reserve doves to keep pushing the case for further quantitative easing, especially in light of the fact that tail risks associated with the possibility of a European meltdown have been cut back materially. The ECB's successful LTRO operations and the positive Greek PSI outcome have helped in this regard.” RBS: “Less QE (quantitative easing) in the U.S. is positive for the dollar ... dollar will do better against the yen, euro and sterling. In Europe the weakest data is in the countries with the weakest fiscal position, which is worrying and it's still a case of selling euro on any rallies.” According to the bank, EUR/USD will fall to $1.26 during the next 2-3 months in case U.S. data in the coming weeks is positive. Credit Agricole: “There's a risk of EUR/USD sustaining a move below $1.31. There are worries about whether Portugal will follow Greece, whether Greece will need another bailout, whether the underlying issues in the country will be resolved.” Deutsche Bank: “U.S. growth forecasts are being scaled back even as the labor market picks up and that will weigh on the U.S. dollar” – American economic growth is expected to slow this quarter from the fourth quarter's 3% growth (y/y) as consumer spending flattened and exports remained sluggish. However, taking into account euro zone’s problems (primarily, uncertainty about Spain and Italy), the bank’s “baseline scenario remains the euro to drop towards $1.25 in coming months.” Chart. Daily EUR/USD Comment here http://www.fbs.com/analytics/2012-03-13/16878-ubs-rbs-eurusd-forecasts

"BMO: trading on FOMC meeting "(2012-03-13) Analysts at BMO Capital recommend investors selling the single currency versus the greenback ahead the FOMC meeting later today. In their view, one should open EUR/USD shorts at $1.3170 stopping at $1.3275 and targeting $1.2875. The specialists think that the Fed’s Chairman Ben Bernanke will discourage the expectations of QE3 due to the recent favorable economic data, especially employment figures. This is BMO’s baseline scenario. However, the analysts underline that the Federal Reserve is always capable of surprises and if the central bank hints on further quantitative easing, one should try another type of trade like buying Mexican peso against the greenback. BMO doesn’t agree with those experts who advise trading emerging market currencies instead of the major ones. The bank points out that the developing nations are aggressively lowering interest rates, so the risk-on, risk-off trading patterns to which traders have got used may be altered. Chart. Daily EUR/USD Comment here http://www.fbs.com/analytics/2012-03-13/16876-bmo-trading-fomc-meeting

"RBS: analyzing GBP crosses "(2012-03-13) Analysts at RBS claim that the recent strong US data is having a negative impact on the pair GBP/USD because of rate spreads and reduced probability of the Fed’s QE3. In addition, recent dynamics shows that EUR/GBP is also finding itself under pressure. UK manufacturing data released last week (+0.1% m/m in January after +1.1% in December) shows that GBP weakness isn't rebalancing the nation’s economy. It may also mean that that sterling’s decline can be structural rather than cyclical and further weakness is likely. According to RBS, GBP/JPY is overvalued by less than 4%, GBP/AUD may be around 4.7% overvalued, while GBP/NZD is estimated to be 2.3% overvalued. The specialists say that GBP/USD and EUR/GBP look fairly valued from a short-term perspective. The bank underlines that the key driving force of all GBP G10 crosses is rate spreads. The dynamics of pound versus euro, US dollar, Japanese yen, Australian and New Zealand’s dollars is also influenced by significant moves in balance sheets. As for the correlation with risk, it has weakened during the past month for most GBP G10 currency pairs except GBP/USD and GBP/JPY where positive correlations have tightened marginally. EUR/GBP has a positive correlation with risk but this has edged lower since March 5. Further worries over the solvency of Euro zone countries may loosen this correlation further. Chart. Daily GBP/USD Comment here http://www.fbs.com/analytics/2012-03-13/16871-rbs-analyzing-gbp-crosses

"Banks' forecasts for FX majors "(2012-03-13) Data were submitted on March 9. Data from FX Week Comment here http://www.fbs.com/analytics/2012-03-12/16869-banks-forecasts-fx-majors

«999» monthly trader demo contest got started!!! 999 Contest got started!!! Dear traders! Today, on the 13th of March, your favorite 999 Contest has got started. As of today 993 traders from all over the world will do their best to win the competition. The idea of the contest is pretty simple: each participant gets a demo account with 9999 USD balance in it and 1:100 leverage. You can trade 28 major currency pairs and EAs are allowed. 3 participants with the highest balances by the end of the contest period are announced the winners. It will be them who will withdrawable receive prizes from FBS (555 USD, 333 USD, 111 USD). And the contestant with the lowest deposit will get a free FBS MasterCard. FBS wishes all the participants good luck! The contest will take place during 13.03.12-13.04.12 Contestants ranking: http://www.fbs.com/999-demo-contest/participants?type=cur Contest details: http://www.fbs.com/999-demo-contest FBS wishes you Finance,Freedom and Success in trading! (Best mini Forex Broker of 2010 - 2011) Stay connected with FBS because its all about you!

"EUR/USD: main technical levels "(2012-03-12) Technical analysts at Commerzbank underline that the single currency is facing strong resistance versus the greenback in the $1.3291/1.3325 area. As long as euro’s trading below these levels, the outlook for it will remain bearish. Support is situated at $1.3095 (last week's 3-week minimum), $1.3080 (55-day MA) and $1.3050 (50% Fibonacci retracement from this year's advance) and $1.3000. EUR/USD risks dropping to $1.2974/54 (February minimum) and $1.2624 (January minimum). If the pair slides below the latter, it will be poised down to $1.2000. Strategists at Varengold Bank expect EUR/USD to close today below support at $1.3100 citing negative signals from the MACD. Chart. Daily EUR/USD Comment here http://www.fbs.com/analytics/2012-03-12/16866-eurusd-main-technical-levels

"The Fed's policy will remain unchanged"(2012-03-12) On Tuesday the Fed's Open Market Committee meets to decide monetary policy. The announcement of further bond buying can pose a risk to a resurgent dollar this week, but most analysts doubt that will happen. Recent stronger-than-expected February employment numbers (NFP +227K) has quelled speculation that the central bank might resort to a third round of quantitative easing (QE3) to stimulate the economy. However, an antinomy is observed: the US labor market seems do better, but this has not been matched by a rise in production, demand or consumer spending. Many analysts say the FOMC is unlikely to offer new measures to stimulate the economy, especially as the Fed continues with its "Operation Twist" effort to keep long-term interest rates low. The current “Operation Twist”, a $400bn switch into Treasury securities with longer to run until maturity, will use up almost all of the shorter-term Treasuries that the Fed has to sell and take its holdings of some long-term Treasuries close to limits on market liquidity. Bank of America-Merrill Lynch: While the FOMC is likely to acknowledge the oil market risk, as well as the general improvement in activity data recently, we anticipate the statement will still be supportive of the current easing bias. BNY Mellon: Good data will reinforce the Fed's view that what they're doing is working and they're not going to stop now. They seem determined to fight the devil they know instead of the devil they don't. The chance of an even more-dovish FOMC could once more upend the dollar. The fact that these days the dollar seems to be a safe-harbor from Europe's debt crisis may also help the dollar go up at the euro's expense. On the other hand, investors look forward to Bernanke’s announcements about QE3. The Chairman’s silence of may cause the correction. Comment here http://www.fbs.com/analytics/2012-03-12/16864-feds-policy-will-remain-unchanged

"CFTC data: US dollar longs increased "(2012-03-12) The latest Commitments of Traders (COT) report, released on Friday by the Commodity Futures Trading Commission (CFTC), showed that speculative investors increased their net long US dollar position by $6.1 billion (80%) to $15.4 billion. As you may see in the table below, the greenback was bought versus all IMM (International Monetary Market) currencies except Canadian dollar and Mexican peso. The latter are supported by carry trades and high oil prices. Euro, British pound and Japanese yen are sold due to the loose monetary policy of these nations’ central banks, while Australian and New Zealand’s dollars were hurt by the worsening of China’s economic prospects. The net positions for American currency are long for 25th consecutive week, the longest period of positive dollar sentiment since 1999. Chart. Net aggregate speculate IMM position in USD (Source: CFTC, Saxo bank, Bloomberg). It’s necessary to note that the figures cited above are always a week old at the time of their release. Never the less, CFTC data gives a good oversight into how the market is positioned and if/how these positions are being unwound. Comment here http://www.fbs.com/analytics/2012-03-12/16863-cftc-data-us-dollar-longs-increased

"Ichimoku. Weekly forecast. GBP/USD"(2012-03-12) Weekly GBP/USD British pound kept declining versus its US counterpart from late February minimum at $1.6000. On the weekly chart GBP/USD closed last week below the Standard line (1), which is currently acting as resistance. The prices will get support from the Turning line (2) which is moving slowly upwards. The descending Ichimoku Cloud was widening for some time, though Senkou Span A (4) has turned horizontal. As a result, if Tenkan-sen (2) and Kijun-sen form “golden cross” and Kumo starts narrowing, the bulls will get chance to reverse the trend lifting sterling to the lower border of the Cloud (4). Otherwise, the pair will keep moving lower within the current downtrend. Chart. Weekly GBP/USD Daily GBP/USD On the daily chart one may see that the pair’s advance stalled last month and the rate went sideways. Pound failed to overcome important resistance and prices went below both the 9-day MA or so-called Tenkan-sen (1) and the 26-day Kijun-sen (2). As a result, despite the bullish Ichimoku Cloud (3, 4), there’s no uptrend on the chart. GBP/USD is supported only by Kumo: if sterling enters the Cloud, it will likely dip to its lower border – Senkou Span B (4). At the same time, the bulls are struggling to retrace at least a part of Friday’s decline and hold the priced above the Cloud. Chart. Daily GBP/USD Comment here http://www.fbs.com/analytics/2012-03-12/16862-ichimoku-weekly-forecast-gbpusd

"Trade recommendations after Greek deal "(2012-03-12) Greece’s agreement with private creditors and the following ISDA’s decision to admit the Greek debt restructuring entitling to CDS-contracts payments, became the key news events of the previous week. On the back of this deal Fitch Rating agency slashed the Greek sovereign scores from "C" to "RD" ("restricted default"). J.P. Morgan Asset Management strategists confirm that Greece raises serious concerns today. Moreover, there are also risks connected with Portugal or Spain getting infected and the results of the spring elections in France. However, analysts believe that in the short term Greece is largely resolved due to the ECB support and positive global data including the U.S. nonfarm payroll report. In particular, they recommend buying the euro against the Japanese yen. The euro is going to be helped by better risk appetite, and the yen, meanwhile, is weakening. J.P. Morgan: The best is to enter the trade at 108.20 with a target of 114.00 and a stop at 105.50. BMO Capital: If you are bullish on the euro, don't buy it against the U.S. dollar. The yen is the best way to do it because of the massive quantitative easing. Commerzbank: In the medium term the ECB’s expansionary monetary policy will put pressure on the euro, in particular if the outstanding US data continues to point towards a robust economy thus reducing the likelihood of further US quantitative easing. Chart. Daily EUR/JPY Comment here http://www.fbs.com/analytics/2012-03-12/16859-trade-recommendations-after-greek-deal

"Predict NFP": contest results!!! “Predict NFP”: contest results Friday, March 9, 2012 - 16:30 According to Bureau of Labor Statistics, U.S. Department of Labor data Nonfarm Payrolls indicator for February is 227000. Maory Aryani’s guess 230000 is the closest one. The contestant gets an exclusive T-shirt from FBS. Congratulations to the winner. Kind regards, FBS FBS wishes you Finance,Freedom and Success in trading! (Best mini Forex Broker of 2010 - 2011) Stay connected with FBS because its all about you!

"Japan: yen’s safe haven status is in danger "(2012-03-08) The greenback went up versus Japanese yen as Japan posted in January a record current-account deficit of 437.3 billion yen ($5.4 billion) versus 320 billion-yen gap expected. Japanese exports decreased by 8.5% in the first month of the year, while imports added 11.2% rising for 25th consecutive month. A year earlier, in January 2011, there was a current account surplus of 547.2 billion yen. The previous biggest deficit of 132 billion yen was seen in January 2009 and was caused by the sharp drop of the global demand due to the collapse of Lehman Brothers. Such a large shortfall raised serious concerns about the nation’s economic and fiscal condition. As a result, yen risks losing its save haven status. The pair USD/JPY rose from the levels around 81 yen to the 81.50 yen area approaching the recent maximums in the 81.87 yen zone. If the pair manages to overcome this resistance, it will get strength to continue the advance which it began last month. Watch US labor market data later today and tomorrow: US jobless claimed are expected to be almost unchanged at 352,000, while U.S. nonfarm payrolls may have increased in February by 210,000. The greenback is supported by the decreased possibility of more QE in the U.S. Chart. Daily USD/JPY Comment here http://www.fbs.com/analytics/2012-03-08/16841-japan-yens-safe-haven-status-danger

"BMO: trading EUR/USD today "(2012-03-08) Strategists at BMO Capital Markets expect the single currency to rise today versus the greenback on the positive results of Greek debt deal. Then, however, the specialists expect the market’s risk sentiment to deteriorate as the central banks (the European Central Bank and the Bank of England) will likely adopt the ‘wait & see’ approach. The ECB President Mario Draghi may reduce expectations for any future long-term refinancing operations. As a result, the bank recommends investors to sell EUR/USD on the rallies opening shorts at $1.3275, stopping at $1.3380 and targeting $1.2975. The analysts underline that the Greek announcement on private-sector participation may come before the ECB meeting if the percentage will allow the debt swap. In this case the rally would occur earlier and the levels will likely be different. Chart. Daily EUR/USD Comment here http://www.fbs.com/analytics/2012-03-08/16838-bmo-trading-eurusd-today

"The RBNZ is worried about high kiwi "(2012-03-08) The Reserve Bank of New Zealand decided to leave the official cash rate unchanged at 2.5% (in line with the forecasts) citing medium-term outlook for inflation (CPI growth rate is seen in the target range between 1% and 3%). In its statement the central bank expressed concerns about the strength of the national which is caused by the international pressures. The RBNZ underlined that the high value of the New Zealand’s dollar affects the nation’s exports and, consequently, its economic growth. So, if kiwi keeps trading at high levels on a sustainable basis, the odds of the RBNZ rate hike in the coming months won’t be very high. Even if NZD slowly depreciates, “the Bank expects to modestly increase the OCR over the projections horizon (between now and the end of 2014)”. The RBNZ Governor Alan Bollard even talked about the possibility of lowering the borrowing costs in response to NZD’s appreciation and the decline in inflation expectations. At the same time, New Zealand’s monetary authorities seem worried about the easing bias adopted by many central banks all over the world as the regulators may start competing with each other making their monetary policy looser and looser. After this dovish statement was released, NZD/USD declined to $0.8140 before rebounding today above $0.8200 as gains in Asian stocks and prospects for job growth in the U.S. supported demand for higher-yielding assets. Chart. Daily NZD/USD Comment here http://www.fbs.com/analytics/2012-03-08/16837-rbnz-worried-about-high-kiwi

«999» monthly trader demo contest!!! Hurry up to take part and WIN! FBS runs “999” demo contest every month. The idea of the contest is pretty straightforward: each participant gets a demo account with 9999 USD balance in it and 1:100 leverage. You can trade 28 major currency pairs and EAs are allowed. 3 participants with the highest deposits by the end of the contest period are announced the winners. It is them who receive withdrawable prizes from FBS. The total prize fund is 999 USD and the winners receive the following rewards: The total prize fund is 999 USD and the winners receive the following rewards: 1st prize – 555 USD 2nd prize – 333 USD 3rd prize – 111 USD The contestant with the lowest deposit gets a free FBS MasterCard. All the prizes can be withdrawn anytime. Registration is open from: 27.02.12 - 12.03.12 Contest period: 13.03.12 - 13.04.12 Click Here for Registration Click Here to see Participants FBS wishes you Finance,Freedom and Success in trading! (Best mini Forex Broker of 2010 - 2011) Stay connected with FBS because its all about you!

"BNP Paribas on ECB’s and BoE’s policy "(2012-03-07) Analysts at BNP Paribas expect the European Central Bank to adopt a 'wait and see' approach. In their view, evaluation of the LTRO effects will take time. If the financial conditions significantly ease, the ECB may decide to leave interest rate unchanged at 1%. As for the Bank of England, it may keep the rates at the current minimal level of 0.5% until the euro zone debt crisis is over. According to BNP Paribas, this is unlikely to happen earlier than in 2013. In addition, the specialists assume that as the PMIs and CBI show that economic activity in the UK will be at least as strong as the MPC's latest forecast suggests, the central bank won’t expand its asset purchase program either. Comment here http://www.fbs.com/analytics/2012-03-07/16831-bnp-paribas-ecbs-and-boes-policy

"GBP/USD: technical comments"(2012-03-07) British pound fell yesterday versus the greenback sliding from the levels around $1.5880 to $1.5700. Earlier it failed to overcome $1.6000 level and make a sustainable breakthrough above 200-day MA. Sterling got under pressure as the markets were in the risk-off mode because of the uncertainty caused by Greece’s deal with private creditors and the reduction of China’s GDP estimate. Today risk-related currencies including sterling managed to move higher as investors were taking profit on safe havens. GBP/USD was able to consolidate above $1.5700 (100-day MA). Bearish pressure on sterling will ease if it closes the day above this level. Otherwise, the pair will risk falling to $1.5666 (55-day MA) and $1.5645 (February minimums, strong support). Below the latter, pound will get vulnerable for a decline to $1.5500. Technical analysts at MIG Bank think that the outlook for the British currency will remain negative as long as it’s trading below $1.5880. If GBP/USD ultimately overcomes this point, it will get chance to rise to $1.5992 (February 29 maximum) and $1.6165 (October 31 maximum). График. Daily GBP/USD Comment here http://www.fbs.com/analytics/2012-03-07/16830-gbpusd-technical-comments

"What to expect from the BoE's meeting? "(2012-03-07) The next Bank of England's policy meeting will be held on March 8. Many analysts believe that the asset purchase target is likely to be left unchanged at £325 billion this year and a rate cut is not on the agenda. According to the forecasts, the first rate hike will be delivered only in February 2014. "With the housing market and wider economy looking weak, there is actually very little scope for raising interest rates as it would almost certainly trigger a double-dip recession," said Phil McHugh, an analyst at trading group Currencies Direct. Despite the fact that two MPC members wanted to raise quantitative easing purchases by additional £25 billion last month, economists no longer expect any more QE. The shift in forecasts is partly due to the signs the economy is growing modestly after contracting late last year, reduced concerns about Greece's debt crisis and a surge in oil prices. The MPC’s main task is to use monetary policy tools to try and keep Britain's annual inflation rate close to a government-set target of 2.0%. The latest data showed that Britain's 12-month inflation rate fell sharply in January from 4.2% to 3.6%. "Most policymakers would probably view the high oil price as likely to have a clear negative impact on growth given weak consumer demand, and thus overall put downward pressure on inflation over the next 2-3 years," said BNP Paribas economist David Tinsley. Bank of England policymaker Martin Weale said last week that UK inflation may prove more persistent than expected, hinting that it is unlikely the economy will require a further stimulus once the current round of asset purchases ends. This is by far the most explicit indication by an official that the MPC's £50bn increase in stimulus in February could be the last. However, the economy is recovering only slowly and unemployment remains too high. Inflation is coming down and the main projection is still for CPI to fall below the 2% target level by the end of the year. British economy shrank 0.2% in the fourth quarter of last year compared with the third, according to recent official data. A further contraction in the first quarter would place Britain back in recession. График. Daily GBP/USD Comment here http://www.fbs.com/analytics/2012-03-07/16829-what-expect-bank-englands-meeting